Shane Leary joins Miles Yu, who recently visited Taiwan with a delegation from Hudson Institute, to discuss the trip. They then cover recent laws that violate the religious freedom of people in Xinjiang, and how this fits into the broader picture of persecution in China. Finally, they turn to the recent stock market crash in China, which was the greatest weekly economic downturn in the country since 2018.
China Insider is a weekly podcast project from Hudson Institute's China Center, hosted by Miles Yu, who provides weekly news that mainstream American outlets often miss, as well as in-depth commentary and analysis on the China challenge and the free world’s future.
Episode Transcript
This transcription is automatically generated and edited lightly for accuracy. Please excuse any errors.
Miles Yu:
Welcome to China Insider, a podcast from Hudson Institute's China Center.
Shane Leary:
It's Tuesday, February 6th, and we have three topics this week. The first is Miles’ Reflections from his recent trip to Taiwan with a delegation from the Hudson Institute. Then we look at new laws passed in China to persecute religious practice and consider how this fits into the broader trend of religious persecution in China. And last Miles offers his thoughts on the recent crash in the Chinese stock market, which marks the worst downturn for the Chinese economy since 2018. Miles, how are you?
Miles Yu:
Very good, Shane. Glad to be with you again.
Shane Leary:
Me as well. So for our first topic, you recently came back from a trip to Taiwan. Were there any notable takeaways? How long were you there and any notable meetings you want to talk about?
Miles Yu:
I was with the delegation of the Hudson Institute. We were there in Taiwan for a whole week last week. It was a pretty interesting and fruitful visit. We met the important people, obviously the incumbent president, President Tsai Ing-wen and the incumbent vice president and the new president elect of Taiwan President elect Lai Ching-te. And we also made the key members of the opposition party, the KMT, we met with the KMT's candidate in the recent election, the mayor of New Taipei City Hou Yu-ih, as well as the chairman of the KMT, Mr. Eric Chu and his principal foreign affairs advisor, Mr. Alexander Huang. And we also met some other officials and leaders from industry think tanks, defense sectors as well as a lot of leaders of NGOs. I met a lot of my old friends there. I have a lot of friends in Taiwan and we also, through them, I made some new friends. So it was a really, really amazing trip. And I should also take advantage of this, take the opportunity here to thank all the friends who helped make this trip a great success, particularly grateful to many of the people I met in Taiwan who came up to me and say how much they like the podcast. They listen to it, listen to it and gave us a lot of encouragement. Thank you again.
Shane Leary:
Yeah, that's awesome. And I'll echo that to all our international listeners, but especially those in Taiwan. That's really exciting to hear. So in terms of takeaways, I mean, did your visit sort of accord with the way you were thinking about Taiwan previously, or did you take away anything new?
Miles Yu:
Oh yeah. I mean, obviously it confirmed many of my previous beliefs about Taiwan, but also this time it kind of highlighted or crystallized some of the core understandings I have had with Taiwan. First of all, I think the most important takeaway I've had through this trip is that Taiwan is a nation of responsible and proud citizens who deeply care about their government and the welfare of their nation. Democracy has incredible virtue, that it can get your citizens excited because you actually can decide the national agenda and the fate of your nation. So the sense of participation is enormous. Through talking with the parties and citizens from the entire political spectrum, definitely I got a sense that there is a much more commonality shared by all political parties and all kinds of citizens with different opinions than disagreement.
On issues of sovereignty, on issues with international stance they share commonality. And of course, in all democracy there are disagreements on policies, agendas, and methods approaches. So you have this combination of commonality and disagreements, which created a very delicate and healthy balance of political stability and legitimacy on one hand and vibrancy and checks and balance of power on the other. So Taiwan is a very mature and healthy democracy thanks to this great sense of responsible and proud citizenry. I am a big fan of the French author Alex de Tocqueville, who came to the United States as a young, when American Republic was young in 1829 during what we call the Jacksonian democracy. And he wrote about the democracy in America in the early 19th century, and it is the same feeling I had. Of course, I'm not comparing myself to Alex de Tocqueville, but I feel like I'm a foreigner going to Taiwan, observing this incredible new democracy with all and excitement.
So that's my first takeaway. The second takeaway is really Taiwan is a country with an outsized cosmopolitanism. This is really true. Diplomatically isolated, yes. But in Taiwan, everywhere you go, everybody you meet in the street on Taiwan, and you won't get the sense that this is a besieged island, rather it is an island deeply connected with the much larger world. Being physically in Taiwan, you have full access to modern conveniences. You can find anywhere in London, New York City, Tokyo, Washington, DC or Paris. You can also find, of course, subways, wifi, Uber, Facebook, Google, ultimately the symbol of globalization, Starbucks coffee. But in this Taiwanese version of cosmopolitanism, it is not at the expense of tradition and heritage. In Taipei, for example, the very modernized city, you can also easily find things that are uniquely Taiwanese, rooted in history and indigenous culture, antique stores selling Chinese traditional tea sets and exquisite Taiwanese tea everywhere.
The world's largest collection of ancient Chinese arts and priceless paintings, for example, is in Taiwan's Palace Museum, 故宫博物院 (gugong bowuyuan). Of course, you can also find anywhere the intoxicatingly delicious Taiwanese bubble tea. So I also had this feeling that this Taiwanese cosmopolitanism is a result of openness, free flow of information, and an educated citizenry. It is a very genuine, not the kind of fake cosmopolitanism you can see in China where all forms of modern communications are banned. No Facebook, no Google, no YouTube, no easy access to global news and entertainment TV channels. Yes, you can find subways, Starbucks and skyscrapers in Shanghai or in Beijing, but it lacks the true spirit of modernity and freedom. Instead, you go to China, you go to Beijing, go to Shanghai, it is full of phoniness and repulsive socialist realist catch slogans is in its arts and entertainment.
China's cosmopolitanism is as fake as CCPs whole process democracy, in my view. The coffee and bagels in Shanghai may taste the same as in New York City, but the repressive bitterness and stifling heaviness of being in the modernized and thoroughly surveyed communist metropolis is not the future the free people of the world would like to have, because you cannot have true cosmopolitanism without the free people and the democratic government. As an American in Taiwan, I personally felt how incredibly crucial it is that the United States must help Taiwan, and China in certain sense, make sure the model of society represented by Taiwan would prevail over the repressive model of society represented by China. This is not only for the sake of the people and the government of Taiwan, but also for the United States.
Shane Leary:
That's beautifully put. So I kind of want to dig a little bit deeper into the sense of normalcy that you talk about in Taiwan, people going about their business and thriving. From an American perspective, looking at headlines, you might think that Taiwan would be riddled with anxiety and concern over Chinese aggression and things like that. Are they simply numb to it or is there a real confidence there just sort of leaning into their way of life and not letting Chinese aggression dictate their daily life?
Miles Yu:
Well, obviously Taiwan is, after all, is a small island democracy. It has a very strong values, has very strong sense of nationhood by now. So there is more unanimous understanding of what Taiwan faces in the face of Chinese communist threat. But after all, Taiwan is a small country, but that's why Taiwan needs Americans assurance that American would help Taiwan when it comes to this national defense. And United States, obviously, we have some kind of legal as well as moral obligations to do so through such act like Taiwan Relations Act. I think the sense of Taiwanese cosmopolitanism is real because it has created something, also particular national characteristics. People who grew up in liberty and in the government checked by the power of the people can have a totally different personality than people who grew up in tyranny and dictatorship.
In the past, you might say it's hard to distinguish somebody from mainland China or from Taiwan, from Taiwan or from Hong Kong, but there are fewer and fewer Chinese tourists right now. But there are some still, I mean, it's relatively easy for me to identify who might be from China, who might be from Taiwan locally, because you can see people from Taiwan are much more open, much more unhinged when it comes to expressing their idea and their opinions, including their leadership and the cross-strait relationship. People from mainland China, they are always in fear of some kind of reprisal from the Chinese Communist Party. Chinese Communist Party has done a great job in instilling the idea that no matter what you do, what you say, every single from conversation, every single tweet you put on Weibo could be and will be detected by the Chinese Communist Party. So that basically is very, very different. People in Taiwan knows the tool to be a free person, and people in China also know how not to offend the state and the regime.
Shane Leary:
And that contrast between freedom and repression is a great segue for our next topic. I want to shift to Xinjiang where a new top-down sinification campaign has begun. Xinjiang has obviously been a place of great focus and the tension between the United States and China. When you were in the State Department, Secretary Pompeo made the move to designate what was occurring there against the Uyghur people a genocide. And just a few days ago, February 1st, new legislation came into force targeting religious practices. Specifically, these new laws require that all newly built mosques, churches and any other religious buildings must reflect Chinese design elements and aesthetics. They add new controls regarding large scale religious gatherings, requirements of notifying authorities, et cetera. And they increase scrutiny of religious social media posts. So this is one new step in an ongoing campaign of religious persecution. How does this fit into the pattern that we've seen?
Miles Yu:
You are right. Chinese Communist Party is continuing its religious repression against not only Uyghurs, against all organized religions as a matter of fact. This is a part of the much larger war against all religions in China. The CCP is a Marxist Leninist party that follows strictly the most fundamental tenet of communist ideology on religion, which was the first articulated by Karl Marx himself in 1844. In 1844, Marx wrote in an article called “The Critique of the Hegelian Philosophy of Right” in which that Marx wrote, and I quote, “religion is the sign of the oppressed. It is the opium of the people. Therefore, the first requisite for the people's happiness is the abolition of religion.” This straight from Karl Marx, all communist parties in the world follow that basic fundamental tenet of communist ideology on religion. So China is no exception like all communists worldwide, the Chinese Communist Party and all its leaders past present hot-landers or so-called reformers, have all shown this ideological hostility toward all religions.
You may say that the Communist Party has an innate instinct to exercise total control over the main organized religions such as Christianity and Islam. For example, the Chinese Communist party's views on Christianity is that it views Christianity as a main tool of international capitalism to conduct what they call a “color revolution” — to overthrow the Communist party's rule. It has a track record of deepest loathing to any American senior officials, especially state department officials, who have a religious background who may object to CCPs rules on religious freedom ground. And I'll give you a lot of examples, CCPs, the most vicious attacks are normally reserved for the religiously devout American diplomats and senior officials. The notable mentions would include John Leighton Stuart or 司徒雷登 in Chinese. Mr. Stewart was a China born Presbyterian educator who was President Truman's ambassador to China from 1946 to 1949. Mao in particular, viciously attacked him. Also former Secretary of State under Eisenhower was John Foster Dulles, and who was the son of Presbyterian missionary parents in Asia and who harbor a particular interest in China.
And incidentally, John Foster Dulles’ grandfather was John Foster and he was President Benjamin Harrison’s secretary of State from 1892 to 1893, who resigned his post as the Secretary of State to work for the Chinese Qing Dynasty as the senior advisor who was heavily involved in negotiation treaty between the Qing Dynasty and Japan. Another religious official, the CCP really, really hate is a more recent case of President Barack Obama's ambassador to China from 2009 to 2011. That is John Huntsman Jr.. Mr. Huntsman is a devout Mormon despite his generally accommodationist, the moderate view of the PRC regime. But in 2012, Mr. Huntsman run for president. In the race, candidate Huntsman was the most feared and hated man from the PRC point of view, and he was the most viciously attacked. Far more attack was reserved for him than say other former hawkish candidates such as Mr. Newt Gingrich and Ron Paul.
Because the CCP is totally paranoid about a Mormon president in the United States would vigorously push for religious freedom in China, which would then lay the foundation for the demise of the communist regime. I may also add that since I serve as an official in the Trump administration. More than any previous American administrations, the Trump administration led by Secretary of State, Mike Pompeo, vice President Pence, Governor Sam Brownback, has been most vocal and unprecedented in its policies and practices in criticizing the CCP government for its egregious religious oppression against the Uyghurs, the Tibetans, the Falun Gong followers, the Christians, the Muslims, and other faithfuls. This is another root cause of the much more enhanced hostility from Beijing against Washington during the Trump administration. In my view, if America's agenda is to prevent the CCPs model of governance from becoming a global norm, religious freedom in China must be first of the first component of that agenda.
Shane Leary:
Given this broader ideological hostility you've laid out to religion and this broader campaign of religious persecution, what are the actual methods that they're using to persecute religious freedom in China?
Miles Yu:
Well, obviously, the most obvious method is that you have total control of the country: country’s information, country’s religious practice. But specifically the Chinese Communist Party’s control of the organized religion in China adopt a two-pronged approach. One is a control of clerical appointment. Another one is the control of canonical interpretations. The CCPs Politbureau must wrest the control of religious clerics appointments from the Vatican, from the Middle East. General Secretary Xi Jinping has already scored a major victory over Pope Francis because the Vatican, the Pope himself in particular, has surrendered the Pope's right to appoint Chinese bishops and it would allow the CCP to appoint its own communist apparatus as bishops in charge of the enormous Chinese Catholic community. Much of that is still underground. So the other side, of course is to concentrate on retranslating Christianity, Islam scriptures, the Bible, the Quran in particular, and in all other major teachings and books of religions. Xi Jinping in November 2019, launched a massive project to retranslate the Bible, the Quran and other key religious canonical works into Chinese. And the purpose of that is, I quote “In accordance with the core values of socialism.” In other words, to make all organized globalized religion sinicized, controlled by a communist party
Shane Leary:
Turning to the Chinese economy, the Chinese stock market has lost $6 trillion, that's US dollars worth of value, in the past three years and is continuing to plummet. They just experienced one of the worst crashes in three years. Many Chinese indexes, including the Shanghai Composite Index and others, fell 6% or more in the past week. Miles, is there any hope here for investors, for the Chinese people who most directly deal with the fallout of these downturns? And what are your thoughts on this in what this says about the trend of the Chinese economy?
Miles Yu:
Well, the root cause of all the stock market crash, literally crash, is of course the Chinese people and the investors have lost the confidence in the Chinese communist command economy. The idea that Chinese Communist Party will dictate how the market would go. So with the consumer confidence in the economic system under communism is gone and of course the stock market just started to crash and keep plunging. China's stock market in Shanghai, for example, the benchmark was, well, the Chinese communist Party wants to preserve the market as indexed to about 3000, right? But now has went way down to the mid 2,600 and that's a big deal. The recent crash is very telling. On February 2nd, just a week ago, China's A share just plummeted. All of a sudden, it lost about 4% in one day and broke the psychological barrier of 2,700. So it is just absolutely — millions of Chinese people who have shares in the stock market just lost their money.
Chinese stock market is divided into two shares, A share, and B shares. A share is index according to Chinese yuan. B share is basically based upon US dollars. So it's very difficult for international investors to buy A shares. A shares are mostly reserved for predominantly overwhelmingly Chinese investors. So A share is very important. It's much larger than B share for capitalization. And so they just began to plunge in. And this is really amazing because all of a sudden, the nation basically is in a panic mood and there's no press there to register the anger resentment, except a very peculiar channel that is the US embassy’s, the Weibo account, which is basically equivalent to Twitter or X account in West. So on that day, the US embassy in China tweet some very innocuous items. One of them is about how to protect the giraffes with modern technology, but the frustrated and angry Chinese investors found that a channel to vent their frustration and anger.
So in the comment section, tens of thousands of Chinese investors lost their money and they began to viciously attack the Chinese system and against the Chinese what I call the black box operation of the stock market. And none of that is about how to protect the giraffes. And this kind of stuff is going on. And in all other US embassies following Weibo tweets, you find the same kind of phenomenon. So people are angry, Chinese Communist Party’s approach response to this is: the order, the propaganda department ordered the Ministry of State Security, the MSS to put out the all these harsh editorials, ordering the Chinese people to be optimistic. It is a state order. And then with that, you see a lot of sarcasm and pretty devastating humor against the party. So economy and politics are not separated in this case, particularly in China where ordinary Chinese put off their enormous savings into stock market.
Shane Leary:
So there's a lot of fear and concern for the Chinese economy in America, particularly on Wall Street, which exercises incredible influence on US policy. And there's concern for good reason. Obviously the global economy is profoundly interconnected and any catastrophic economic situation in China will have consequences not just for Wall Street but for main streets across the country. But on the other hand, it could weaken the CCP both politically, militarily and diplomatically. So how do you balance these considerations in your mind? Is a massive Chinese economic downturn given our rivalry with them, is that something we should cheer or is that something we should be cautious about?
Miles Yu:
I mean, it's not that black and white choice. The problem with China is that the Chinese Communist Party reigns supreme. So in the past you might say, “Hey, there is a window of making money in China, that is through China's non-state connection with the international free trade system.” That's true, but that window is closed and the Xi regime is completely anti-market. The only way they know how to handle economy is through orders from the Politbureau, from Xi Jinping himself. As a matter of fact, the hate international community finding out economic reality of China. Just last week, they penalized with incredible fines, six Western due diligence agencies, including the credit rating agency of Standard Poor’s. So this is not a way to increase and restore your credibility in the international system. So I think the Chinese Communist Party, either you totally become free democratic and market oriented, or you cannot really have half open half dictatorial system, so the house divided cannot stand.
Shane Leary:
I think that's a great note to end on. Miles, thanks so much for taking the time and look forward to doing this again next week.
Miles Yu:
Looking forward to talking with you again, Shane.
Shane Leary:
Thanks for listening to this week's episode of China Insider. If you enjoy the show, please share with your friends and colleagues and for our Chinese language audience, be sure to come back and check out our monthly Chinese language episodes, which are released on the same channel as well as the Hudson Institute YouTube channel. For more research and analysis from the China, be sure to find Miles on X and then head on over to hudson.org where you can read and watch more on these and other pressing issues around the globe. Finally, please review and subscribe wherever you are listening from to help grow the show. From all of us at China Insider will see you next week.